The US Treasury Department told Congress that mixers — tools that obscure crypto transfers to protect privacy — can have legitimate uses. Its report to Congress, prepared under directives in the GENIUS stablecoin regulatory framework, said consumers increasingly using digital assets for payments “may want to use mixers to maintain more privacy in their consumer spending habits.”
The report acknowledged that “lawful users of digital assets may leverage mixers to enable financial privacy when transacting through public blockchains. For instance, individuals may use mixers to protect sensitive information on personal wealth, business payments or charitable donations from appearing on a public blockchain.”
At the same time, Treasury warned about risks from darknet or non-custodial (decentralized) mixers, which have been used by cybercriminals to launder money or move illicit funds — including operations linked to North Korea. The authors noted that custodial mixers, which take possession of user funds during mixing, could be a source of identifying information that helps track users and transaction flows.
Privacy in crypto has been a flashpoint as financial surveillance ramps up and US lawmakers push to impose KYC requirements on digital asset service providers and possibly DeFi platforms. The Digital Asset Market Clarity Act of 2025 (the CLARITY bill) drew concern from DeFi leaders and investors over ambiguous language that might force DeFi platforms to collect user identities and that offered insufficient protections for open-source developers, according to Alexander Grieve, VP of government affairs at Paradigm.
Prominent voices have also warned about broader privacy threats: former hedge fund manager Ray Dalio has said central bank digital currencies (CBDCs) are likely and pose a major risk to digital privacy, calling them a “very effective controlling mechanism” in an interview with Tucker Carlson.
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